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European Financial Services Proposals

Part of Oral Answers to Questions — Foreign and Commonwealth Office – in the House of Commons at 5:51 pm on 1st December 2009.

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Photo of Jeremy Browne Jeremy Browne Shadow Minister (Treasury) 5:51 pm, 1st December 2009

I do not know if I am grateful for that intervention. When I spoke about paranoia about the European Union, I did not necessarily have the hon. Gentleman in mind, although he may have identified with that feeling. There are many good reasons why London should be the financial services capital of Europe, as it offers entrepreneurial dynamism and labour market flexibility, and the fact that we speak English helps. We should not be burdened by regulation. In fact, I made the point, which no one else has made, that regulation should not be a byword for dumbed-down lowest-common-denominator uniformity. It should allow competition and innovation, and in those circumstances we should be confident that London and Britain can do better than other European countries such as France and Germany. I have also advanced the reasonable argument that it would be a mistake to go into the negotiations patronising other EU countries by telling them that they have everything to learn from our regulation of the financial services sector and we could not conceivably learn anything from them, even though the evidence of the past few years suggests otherwise.

I wish the Minister well, as this is a valid exercise. In a world of global interdependence there is a role for a European dimension. We need to make clear the parameters of that role and where nation states should rightly retain pre-eminence-that has been usefully discussed today. I do not share the somewhat paranoid perspective, in my view, of the hon. Member for Stone and others that any discussion of a European dimension to regulation is inherently bad. There is a role for it, but we must make sure that it is proportionate and that there are clear lines so that we do not have confusion the next time there is a financial crisis about which regulatory systems have which responsibilities.

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